BYD adopts same partner as BMW for CKD assembly in Malaysia
BYD has decided to collaborate with contract manufacturer Inokom on local assembly of electric cars in Malaysia. The decision is likely due to significantly tightened import conditions. Inokom is also the local manufacturer of the BMW i5 for the Malaysian market.
BYD Atto 3 in a showroom in Malaysia
Image: BYD
As part of its expansion into the Southeast Asian market, Chinese automaker BYD has secured a key partner: contract manufacturer Inokom, part of the Sime Darby conglomerate, which already handles the distribution of BYD vehicles in Malaysia under the name Sime Motors.
Since 1997, Inokom has operated a vehicle plant in Padang Meha, Kulim District, and counts brands such as BMW, Chery, Hyundai, Kia, Mazda, Mini, and Porsche among its clients. Since January, the all-electric BMW i5 has also been manufactured there.
By choosing to partner with Inokom, BYD is also moving away from reported considerations of potentially building its own vehicle plant in Malaysia. However, this is not a full assembly operation; instead, the agreement provides for the assembly of vehicles using the CKD (Completely Knocked Down) method, where vehicles are assembled on-site from delivered parts and components. The companies have not yet disclosed which models will be assembled in Malaysia or when production will begin.
Jacob Ma, managing director of BYD Malaysia, said local assembly is an important part of the company’s long-term commitment to Malaysia. “We aim to bring BYD’s expertise in new energy vehicles and battery technologies closer to the Malaysian market while contributing to the continued development of the local automotive industry. This partnership marks another step in BYD’s growth in Malaysia alongside BYD Sime Motors. We remain focused on strengthening our local presence and exploring opportunities to deepen our investment through collaboration with local industry partners.”
New import rules force BYD shift towards local assembly
Behind this move, however, is likely also a tightening of Malaysian import regulations: since 1 July 2026, fully assembled EVs imported from abroad may only be introduced if their CIF value is at least 200,000 Ringgit (approx. €44,000 euros) and their engine power is at least 180 kW. The CIF value (Cost, Insurance and Freight) includes the value of the goods, including transport and insurance costs up to the port of import, but excludes import duties and taxes payable there. Previously, a four-year tax incentive for such imports had expired at the end of 2025.
The new requirements make it particularly difficult for more affordable electric vehicles, such as those offered by BYD, to enter the market. Local assembly at Inokom could therefore help the Chinese manufacturer expand its presence in Malaysia despite the changed framework conditions. BYD has not yet confirmed a direct connection between the new regulations and its specific choice of partner.
The pressure exerted by the changed import conditions on BYD and its Malaysian distribution partner Sime Motors is evident in a current advertising campaign on the latter’s website: the company is promoting “final 2026 CBU units” of the Atto 3 and Sealion 7 – meaning the last fully assembled, imported units of these models, which also fall well below the 200,000 Ringgit threshold. This allows BYD and Sime Motors to sell off certain remaining stocks under the previous rules. However, since the Atto 3 and Sealion 7 are too affordable to meet the new import regulations, BYD can no longer import them fully assembled to Malaysia – making both models likely candidates for CKD assembly with local partner Inokom.